USDA's Schafer: Biofuels positives underreported

Secretary of Agriculture Ed Schafer said that the food versus fuel story has been underreported as well as overreported. Speaking to the Society of American Business Editors and Writers in Kansas City this week, he said, "Taking ethanol out of the picture leaves nothing to blunt soaring oil prices. It just leaves us to pay more for gasoline."

Despite recent floods, Schafer said the outlook for the 2008 crop yields is good. "We're on our way to harvesting the second best corn crop, with 12 billion bushels of corn, and on track for the fourth best year ever for the soybean crop, at 3 billion bushels," he said.

On the under-reported side of the story the Secretary stated that there is "broad support" for renewable fuels in the new farm bill. "The bill also has flexible policy tools that will help make second generation cellulosic biofuels a commercial reality," he said. "For the first time, USDA will be able to help biorefineries adopt new production technologies on a commercial scale and offer loan guarantees of up to $250 million to help promising technologies jump out of the laboratory and into the marketplace much faster and on a larger scale."

He said the new cellulosic Poet Plant in Scotland, South Dakota, will be producing up to 20,000 gallons later this year from corn cobs and corn fiber.

Asked about the GOP platform plank calling for an end to mandates on ethanol use, he replied that there is no renewable fuels mandate. "We have a goal or target to generate 36 billion of renewable fuels by the year 2020," he said. "I think the Republican platform committee plank reflects a going back to its grassroots view that government is not there to tell us what to do. I believe the tax incentives need to stay until the industry is mature and the infrastructure is developed. But I do not want the industry to become dependent on credits."

Schafer was asked to give his view on why the U.S. lacks an overall energy policy. "We've been talking about a national energy policy for years," he responded. "Unfortunately, our representative government tends to help divide and pit one state against another. If my state has oil, then I champion oil. If I have coal, I champion coal. But we don't have unlimited resources or money. It will take strong leadership to develop an overall energy policy. We can't be championing wind at the expense of coal, for instance. A national policy would consider all these resources, and state the direction that this country needs to go."

Secretary of Agriculture Ed Schafer said that the food versus fuel story has been underreported as well as overreported. Speaking to the Society of American Business Editors and Writers in Kansas City this week, he said, "Taking ethanol out of the picture leaves nothing to blunt soaring oil prices. It just leaves us to pay more for gasoline."